As Wall Street experienced its best August since the 1980s, the hedge fund industry posted its fifth straight positive month returning 2.42 per cent in August, according to the Barclay Hedge Fund Index, compiled by BarclayHedge, a division of Backstop Solutions. By comparison, the S&P 500 Total Return Index was up 7.19 per cent in August.
For the year-to-date, the hedge fund industry added to its gains in August, returning 2.40 per cent for 2020. The S&P Total Return Index returned 9.74 per cent over the same period.
All but three hedge fund sectors tracked by the Barclay Hedge Fund Indices were in the black for August.
“The Covid-19 pandemic remained a very real factor for businesses, economies and societies in August, but investors continued to see significant causes for optimism,” says Sol Waksman, president of BarclayHedge. “Stock markets posted record results as US durable goods orders exceeded expectations, home sales surged and consumer spending continued to increase, with markets responding accordingly.”
In August, the Pacific Rim Equities Index led the way among hedge fund sectors with a 4.60 per cent return. The Emerging Markets Asian Equities Index returned 4.35 per cent, the Emerging Markets Asia Index and Emerging Markets Global Equities Index each produced a 3.76 per cent yield, the Healthcare & Biotechnology Index was up 3.72 per cent and the Emerging Markets Eastern European Equities Index posted a 3.35 per cent return.
The few sectors in the red in August included the Emerging Markets Latin American Equities Index, down 2.32 per cent, and the Emerging Markets Latin America Index, off 1.26 per cent, as Latin American economies and corporates continued to be particularly stressed by the Covid-19 pandemic. The third sector in negative territory for August was the Equity Market Neutral Index, off 0.72 per cent for the month.
For the year-to-date, hedge fund sectors were split in August between those in the black and those in the red. Leading gainers for the year included the Technology Index, up 15.74 per cent, the Volatility Trading Index, gaining 12.15 per cent, the Emerging Markets Asian Equities Index, returning 10.04 per cent on the year, the Healthcare & Biotechnology Index, up 9.90 per cent, and the Fixed Income Arbitrage Index, gaining 8.52 per cent.
Among the sectors in the red for the year were the Emerging Markets Latin American Equities Index, down 13.67 per cent, the Emerging Markets MENA Index, losing 5.91 per cent, the Emerging Markets Eastern European Equities Index, slipping 5.00 per cent, the Emerging Markets Global Equities Index, off 3.63 per cent and the Pacific Rim Equities Index, down 3.45 per cent.
